Earlier this year, predictions and rumors that Microsoft was going to acquire Salesforce started popping up like crazy, and while they’ve died down for the most part, many analysts still believe such a deal could still end up happening in the near future. Microsoft has a mere 6% share of the lucrative CRM software market, while Salesforce is the undisputed leader of the market with a 20% share, so the deal would make a lot of sense for Microsoft. When reports of a potential acquisition were still coming out, it was claimed that Salesforce’s asking price was around $70 billion, so if this deal does end up going through, it’ll be a massive one.
It’s been nearly 6 months since talks of Microsoft acquiring Salesforce fizzled out, but some Wall Street analysts still believe the deal could go through sometime soon. The investment bank Stifel wrote in a recent note that it maintains a “buy rating” for Salesforce because the company’s heading into its seasonally strongest quarter, but also because of a potential deal with a big tech company. “A level of optionality still exists to the upside as industry contacts refuse to dismiss the notion of CRM joining forces with another tech behemoth like Microsoft or Oracle,” it wrote. This comes just a few days after Credit Suisse conveyed a similar notion in its note for Salesforce. “We believe that the potential for an acquisition still provides further optionality for the stock and, at the very least, a ‘higher floor’ for the stock — resulting in a continued favorable risk/reward,” it wrote. Salesforce would certainly make for an attractive acquisition target for Microsoft. Its cloud CRM software, used by sales and marketing reps, is the de facto market leader with a nearly 20% share, while Microsoft is considered 4th in the space with just about 6% market share. Salesforce has been consistently beating earnings in recent quarters, and its shares have been trading at record-high levels too, giving a market cap of roughly $50 billion.
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